French Aircraft Maker Expects $9 Billion Rafale Deal to Be Signed Within a Month

 
 

French aircraft maker Dassault Aviation expects a final contract for the purchase of 36 fourth generation multirole fighter jets for the Indian Air Force to be signed within the next four weeks, according to a recent company press release.

“During French President François Hollande’s visit to India, French and Indian government authorities signed an intergovernmental agreement paving the way for the conclusion of a contract for the sale of 36 Rafale fighters to India,” the press release notes.

“Dassault Aviation is very pleased with this progress, and is actively supporting French authorities in their efforts to finalize a complete agreement within the next four weeks.”

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As I reported yesterday (See: “India to Consider French Fighter Jets for Navy’s Newest Aircraft Carrier”), a delegation from the aircraft maker is scheduled to meet with senior officials of the Indian Navy to pitch the naval version of the Dassault Rafale fighter jet on January 29.

Yesterday, French President Francois Hollande and Indian Prime Minister Narendra Modi signed a memorandum of understanding on the inter-governmental agreement detailing the technical aspects of the deal, which have be a major stumbling block in negotiations over the last couple of months.

The Indian Air Force wanted a customized version of the aircraft including modifications and reconfigurations to allow the installation of Indian-made and commercial-off-the-shelf systems and weapons.

Dassault Aviation could also not confirm that it would be able to meet an early 2016-2017 delivery schedule of the fighter jets due to pre-existing contracts with Egypt, Quatar and the French Air Force.

These issues have apparently been resolved now according to a joint statement issued after Hollande-Modi meeting on January 25: “The two leaders welcomed the conclusion of the IGA [inter-governmental agreement] on the acquisition of 36 Rafale fighter aircraft in flyaway condition, except for some financial issues relating to the IGA which they agreed must be resolved as soon as possible.”

French President Francois Hollande added that “[S]ome financial issues remain that will be sorted out in the next coming days.” As I reported previously:

The current contract under negotiation includes an offset clause which stipulated that France will have to invest 50 percent of the contract value as offsets in India. The costs for the 36 Rafale fighters – excluding the maintenance contract and the weapons suite – are estimated at around $4.5 billion.

Last April, India had announced that it would only purchase 36 French-made Rafale fighter jets instead of the original 126 under the now-scrapped $20 billion MMRCA (medium multi-role combat aircraft) project.

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